Basic Economics Quiz

1. What do we call it when a price goes up over time, so that money buys less than it used to?

Recession Inflation Taxation Deflation

2. If a shop has 100 umbrellas to sell and it starts raining heavily, what is likely to happen to the price?

The price will fall because umbrellas are getting wet The price will stay the same because the shop ordered them months ago The price will rise because more people want umbrellas than there are umbrellas to sell The price will fall because nobody planned to buy an umbrella today

3. What is a "budget"?

A type of bank account for saving money A plan for how money will be earned and spent The amount of tax a person pays each year A loan taken out to buy something expensive

4. A new games console costs $500. A company releases an identical-looking but older model for $200. Many people buy the $500 one anyway because they think it must be better. What economic idea does this best illustrate?

Supply and demand Price fixing Perceived value Inflation

5. What does it mean when a country "imports" something?

It makes the product and sells it to other countries It taxes foreign goods to protect its own factories It buys a product from another country and brings it in It stores goods in a warehouse for later sale